Observers Weigh In On Industry Fallout of WS Cuts In Service To Eastern Canada

Lynn Elmhirst, Open Jaw

The human impact is clear when an airline announces - leading into the holiday season - that it's having to slash 100 flights to an entire region of the country, plus cut the same number of jobs.

But the impacts of yesterday's WestJet announcement don't end there.

And they are more complex than the immediate, human impact.

WestJet's announcement increases pressure on the federal government to provide financial aid to airlines - and paints an ugly picture of the cost of failing to do so immediately. 

Robert Kokonis, president of AirTrav Inc. and Open Jaw's Aviation Analyst, told GlobalNews that yesterday's WestJet announcement is just the tip of the iceberg when it comes to airline cuts, and is a “precursor” of “much more dire news to come” regarding Canada’s aviation sector if the federal government doesn’t intervene soon.

“We’re going to see unravel what took our country’s top carriers not years, but decades to build, and it’s all going to unravel within a matter of months,” he said. 

“It’s going to be a massive impact on jobs, interrelated ability of our carriers to connect Canada with the world unless we do something. So [WestJet's] announcement is just the leading edge, unless we do something fast.”

Kokonis told Open Jaw that yesterday's WestJet cuts, "will get the attention of politicians, particularly Liberal MPs in that region."

He and another industry observer told Global News the cuts also present an opportunity for other airlines to gain market share of Atlantic Canada's domestic and international routes. 

“I’m sure it’s disappointing for travellers and for people who want choice and people are going to see service cut back in their communities," said Ambarish Chandra, associate professor of economics at the University of Toronto, but, "you can understand why WestJet is making these decisions and why other airlines are making these decisions.” 

Kokonis points out to Open Jaw that it may not be Air Canada who benefits most. "It was just the end of June when Air Canada announced a cut of 30 regional routes – primarily in Atlantic Canada and Quebec. The opportunity may lie more with some of the Tier 3 carriers such as PAL."

Or an industry outlier may seize their opportunity to grow their business. "Maybe we’ll see an existing or upstart ULCC start some new Atlantic Canada service."


Comments

Shawn Friesen - October 15, 2020 @ 14:44
You won't see anything until the Atlantic bubble pops, if gov't are unwilling to do that, what do you expect will happen. Rapid testing and gov't working with the industry is the only way to get travel going again.

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